San Diego 
A former IRS agent indicted first on tax fraud charges, then for trying to hire a hit man to murder key witnesses against him, pleaded guilty in federal court Friday to a dozen charges that could send him to prison for nearly three decades.

Steve Martinez, 50, was indicted in April 2011 by a federal grand jury for a tax scheme in which he stole $11 million in tax payments from wealthy clients. About a year after that indictment and while out on bail, Martinez was caught on FBI surveillance promising $100,000 to a former employee for murdering four clients who lived in Rancho Santa Fe and La Jolla and were expected to testify against him.

He faces between 27 years and 33 years in prison when he is sentenced on Nov. 30, said Assistant U.S. Attorney Joseph Orabona.

Martinez is a former revenue agent who opened his own tax preparation business in 1998. Beginning in 2004, he embarked on a fraud scheme that targeted about a dozen wealthy clients.

He gave them bogus tax returns showing that they owed a large amount of tax, then convinced them to write checks for the taxes due to a client trust account — and not directly to the IRS or state tax authorities.

He then filed a different set of false tax returns to the government, showing the clients owed little or no tax.

Martinez used the money largely to support a luxurious lifestyle that included a large estate with a spectacular pool in Ramona, a beach home in Mexico, an airplane and a boat. He also spread the money among several other bank accounts he controlled, according to prosecutors.

After his indictment, Martinez contacted a former employee. Prosecutors said he handed the employee four packets, each with documents detailing four fraud victims who were set to testify against him.

Included in the documents were color photographs of one victim’s home. He offered the employee $100,000 in cash to kill the victims, suggesting he use a silencer and two separate weapons.

The employee took the information to the FBI, which recorded a March 1 meeting between Martinez and the employee at the employee’s home.

Defense lawyers David Demergian and Geoffrey C. Morrison said outside court that Martinez was also motivated by more personal concerns. Demergian said he has a disabled son who needed care.

That did not excuse Martinez’s behavior, the attorneys said, but helps explain some of it. “He found himself in a situation with extreme personal, professional and emotional issues that affected his judgment,” Morrison said outside court.

A second man, Norman Thellman, pleaded guilty on Aug. 1 to money-laundering charges. He was a limousine driver for Martinez who was enlisted to pay the money to the hit man after the killings were completed.

As part of the guilty plea, Martinez will forfeit $11 million, but how much the government ultimately collects is unclear. The victims of the fraud still owe the IRS for the taxes that were not paid, but any money recovered from Martinez could be used to satisfy those tax claims.